Santa Ana - CA : The
Integrated Waste Management Department (IWMD) announces
the department's intent to move forward on two major policy
issues: importation of nonOrange County solid waste and
increasing the landfill gate fee . Since Orange County
' s declaration of bankruptcy, IWMD has been considered
one of the major factors in the County's plan to recover
from the financial crisis. IWMD is one of the County's
largest assets, as well as one of the County's biggest
revenue generating mechanisms, as it owns and operates
the only disposal facilities in Orange County.

Importation of Non-Orange County Waste

On May 1, 1995, IWMD issued a Request for Proposals (RFP)
for acceptance of nonOrange County trash as a means of
generating revenue to aide the County's financial situation.
Currently, the County's three daily working landfills
accept only Orange County waste, and trash generated outside
of Orange County is prohibited from disposal by County
ordinance. IWMD's RFP requests proposals from waste haulers
and/or government entities outside of Orange County interested
in using Orange County landfills if the ordinance is changed.
If successful, importation of nonCounty trash could generate
as much as $55 million annually for the County of Orange.

Since 1989, trash received at Orange County landfills
has decreased by approximately 30 percent due to impacts
of the recession and the success of community recycling.
Tonnages are expected to continue in this decline as the
cities and the County meet state mandated recycling goals
and major recycling infrastructure comes online in Orange
County. The Orange County Landfill System (made up of
the Olinda/Olinda Alpha Landfill in Brea, the FRB Landfill
in Irvine and the Prima Deshecha Landfill in San Juan
Capistrano) was designed as a large volume disposal facility
and is permitted to accept 16,658 tons of waste per day.
Current volumes are only reaching 10,000 tons of waste
per day. As a result, there is over 6,000 tons per day
of available landfill capacity not being utilized by Orange
County residents or industry. This additional capacity
has significant economic value that could benefit the
County of Orange during these critical financial times.

At current Orange County usage, the permitted life of
the landfill system is approximately 53 years. However,
to even further extend landfill capacity and maximize
the life of the disposal system, in 199193 IWMD engineered
masterplans for each of the landfills. With implementation
of planned, masterplan improvements, the landfill life
will extend to approximately 65 years. If noncounty waste
were accepted, the life of the landfill system (as based
on the masterplan improvements) would decrease by 16 years,
to result in 49 years of remaining capacity. Acceptance
of 6,000 tons per day of trash at the minimum nonCounty
rate of $30 per ton could generate as much as $55 million
annually. While there are increased operating costs associated
with importation of waste, these costs are nominal as
the disposal facilities were desi~ned to oPerate as a
hi~h volume disposal system.

IWMD is issuing the RFP to determine the level of interest
from waste haulers and/or government entities outside
of Orange County who would sign termspecific contracts
in order to use predetermined amounts of Orange County
landfill capacity. Proposals are required to meet criteria
regarding tonnage, contract term, rate, destination, hours,
equipment, security deposits, regulatory compliance and
AB 939 compliance. IWMD anticipates interest from San
Diego and Los Angeles wasteshed areas and, the destination
of the waste will be submitted as part of the proposals.

The deadline for submitting proposals to IWMD is May 31,
1995. Based on the responses to the RFP, the subsequent
approval process would include environmental analysis,
and public hearings, amendment of the County ordinance
and negotiation and award of contracts. The earliest that
acceptance of nonCounty waste could begin is November
1, 1995.

Gate Fee Increase to $35.00

IWMD is recommending a gate fee increase to $35.00 per
ton effective July 1, 1995. Based on staff analysis contained
in the Department's Operational Financial Review IWMD
has found that a steady decline in tonnage received at
the county's landfills, coupled with increased regulatory
requirements, will mean a serious shortfall in funds needed
to operate the county's landfills over the next five years.

The report warns that unless waste disposal fees, or gate
fees, are increased immediately, the county coul face
a $103 million deficit by 2000. County gate fees currently
stand at $22.75 per ton, and have not been increased in
four years. By comparison, Riverside, San Bernardino and
San Diego counties charge in the range of $34 to $43.

In 1989, county landfills collected 4.4 million tons of
waste. Since then, landfill tonnage has dropped approximately
30 percent to 3.1 million tons. The decline can be attributed
to a combination of factors, notably increased success
of community recycling programs, the development of major
recycling infrastructure and the ongoing slump in the
construction industry.

IWMD has taken prudent steps to control operating costs.
In an attempt to maintain costs, IWMD stopped operations
at one of their four county landfills, Santiago Canyon,
and reduced its staff. The department has deferred major
capital improvement projects and, until the introduction
of recent federal legislation, had been working in conjunction
with Orange County cities to develop waste flow agreements
that would help ensure that waste is not diverted to competing
landfills in other counties. As a result, gate fees have
been frozen at the rate of $22.75 Per ton for four years

At the same time that the county is experiencing a significant
decline in tonnage, new environmental regulations have
added millions of dollars in costs to landfill operations.
Federal landfill requirements are expected to cost $60
million over the next five years, These requirements come
at a time when it is also necessary to financially plan
for the County's potential liability for closed landfill
sites. Over the past 50 years, the County has owned or
operated 21 landfills that are currently closed. Adequate
reserves must be set aside to cover any potential County
liability, as well as litigation costs that may be incurred
as a result of the complex nature of environmental litigation.

Since the last gate fee increase in July, 1991, IWMD revenues
have not been enough to cover anticipated expenditures.
With this in mind, IWMD has continually been rephasing
capital expenditures such that actual drawdown on the
reserves is minimal. However, certain capital expenditures
must begin in order to maintain operational efficiencies
and system capacity. IWMD's fiveyear projections show
that, even with a $35.00 per ton gate fee, reserve monies
of $10 to $20 million each year are required to balance
the budget. The ending cash balance level in FY 1999/00
is expected to be approximately $25 million.

Based on the impact of declining tonnages and increasing
regulatory costs, the IWMD report recommends a gate fee
increase to $35.00 per ton for the next five years. This
increase will avoid a deficit and maintain a cash reserve
level necessary for prudent landfill operations. This
increase keeps Orange County's gate fee level competitive
with competing facility and will negate the need for incremental
increase in each of the next five years. IWMD estimates
that this one time increase, will translate into an increase
of approximately $2.00 per month for Orange County homeowners.

IWMD generates most of its revenues from gate fees charged
to waste haulers. These fees are passed along to homeowners
through city water bills, sanitation districts, property
taxes, or directly by the hauler. In Orange County, household
charges for collection and recycling range from $9 to
$15 per month depending on the level of service.

The Waste Management Commission will discuss the proposed
gate fee increase on May 11, 1995. This recommendation
regarding a proposed increase will be passed on to the
Orange County Board of Supervisors to be discussed at
a special meeting on May 24, 1995. If the Board approves
an increase, it would become effective July 1, 1995.

Importation and the Gate Fee Increase

Although importation of nonOrange County waste and the
proposed increase in the gate fee are being discussed
at the same time, the gate fee increase is necessary irregardless
of any plans for importation. IWMD's financial analysis
is based on the most conservative tonnage projections
available; these tonnage projections assume only Orange
County waste. IWMD's intent is to plan for the most conservative
financial situation over the next five year period, in
order to avoid additional increases due to optimistic
projections. If importation of nonCounty waste is successfully
implemented, the Orange County gate fee could be lowered
to reflect the infusion of revenue from the additional
tonnage.

The County Integrated Waste Management Department administers
Orange County's solid waste system. In this role, IWMD
is responsible for developing the Countywide Integrated
Waste Management Plan; providing disposal capacity in
the form of landfills; environmental monitoring and maintenance
for active and closed County landfills; and the Household
Hazardous Waste Collection Program.